Enriched Investment Tax Credit
The Enriched Investment Tax Credit complements the existing PEI Corporate Investment Tax Credit of 10 per cent. The tax credit is applied to certain capital investments made by manufacturing and processing businesses.
Who is eligible for Enriched Investment Tax Credit?
To be an eligible applicant, a business must be located in Prince Edward Island and:
- be registered to do business and actively operating in Prince Edward Island;
- manufactures, processes, or develops goods or services primarily for export;
- operates within one of these strategic sectors:
- aerospace and defence
- advanced manufacturing and processing
- renewable energy and clean technology
- information and communications technology
- creative and cultural industries
- first-of-its-kind exportable goods or services in other sectors may be considered.
A business that has a defaulted outstanding debt obligation on file in the Province’s Central Default Registry is not eligible for Innovation PEI assistance.
What activities and costs are supported?
Investments in qualified property to implement high-productivity applications with a strong export focus.
Qualified Property means machinery or equipment as prescribed for the purposes of paragraph (b) of the definition “Qualified Property” in subsection 127(9) of the Federal Act (acquired by the Company after 1992).
In general, the property must not have been used or leased before it was acquired by the Company and will be used by the Company in Prince Edward Island primarily for the purpose of manufacturing or processing.
What level of assistance is available?
The Enriched Investment Tax Credit provides qualified applicants with a 25 per cent provincial corporate tax credit on costs associated with qualified manufacturing and processing equipment. The credit will be rebated against future Prince Edward Island corporate income taxes paid by the company.
The combined project funding from all non-repayable government sources cannot exceed 75 per cent of eligible costs.
What criteria are used to evaluate funding applications?
Eligible businesses that submit complete applications will be reviewed on a first-come, first-serve basis and are subject to budget availability. An application is considered to be complete and received when all required information has been submitted to Innovation PEI.
The project must provide economic benefit to the province of Prince Edward Island.
If the application is approved, Innovation PEI will require acceptance of a letter of offer stating the terms and conditions of approval. When accepted, the letter of offer shall constitute a contract between Innovation PEI and the applicant(s).
How do I apply?
Innovation PEI encourages potential applicants to consult with an Innovation PEI Business Development Officer for guidance on the suitability of the project and the application process. If the project is not a good candidate for Enriched Investment Tax Credit, the Business Development Officer may recommend alternative funding programs that may be available.
Application must be submitted before any financial or legal commitment is made on the project.
What do I need to apply for this service?
To complete the application, be prepared to provide detailed business information and supporting documents including:
- outline the history and provide a description of the business;
- existing businesses will need detailed financial statements for the previous two years;
- new businesses will need a completed business plan;
- description of the proposed project or activity in relation to the products and/or services delivered by the business;
- a detailed description of the economic benefits to the organization and to Prince Edward Island;
- detailed information on the estimated costs of the proposed project or activity (cost estimates should be supported by written quotations);
- source of funds for the project (for example, lending institutions, banks, government loans and/or grants);
- explanation of the businesses current market position and projected market, outlining any increases in market share; and
- a list of all shareholders and key management personnel.